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ISSN 1684-9833 • Year 5 / No. 20 / November 15, 2013


The Executive Secretariat Informs The SAT of Mexico, in coordination with CIAT and GIZ, provided assistance to Latin American tax administrations on the control of transfer pricing In the collaboration framework between CIAT and GIZ from Germany, on October 29 to 31 of the current year, a study visit to SAT of Mexico took place, with the purpose of benefitting from SAT’s wide experience in the field of controlling the abusive manipulation of transfer pricing.

Metiendo Presión: Estimando la Verdadera Carga Fiscal de América Latina y el Caribe. La Presión Fiscal Equivalente (available in spanish only)

The Executive Secretariat Informs The SAT of Mexico, in coordination with CIAT and GIZ, provided assistance to Latin American tax administrations on the control of transfer pricing CIAT authorities participate in the XVI CeATS Technical conference Regional Seminar on: “Strategic planning in tax administrations of Central America”

In the past three years, we have seen significant progress by several Latin American countries. These countries have not only implemented and adjusted standards to regulate transfer pricing, but have also implemented administrative structures and processes enabling to achieve good results in the control field. This cooperation action aimed to follow the aforementioned evolution that several Latin American countries have achieved in the area and which is complemented with other efforts made in recent years by CIAT’s Executive Secretariat within the scope of the EUROsociAL Program, GIZ from Germany and the “International Tax Compact”. This action was carried out with the participation of officials of the international control areas from the tax administrations of Ecuador, Peru, Uruguay, Costa Rica, Colombia, Chile and Guatemala.

The Tax Administrations Inform Argentina - Switzerland agree on a new agreement to avoid double taxation Bolivia - Collection increases 24% and reaches 39.436 million Bs in October 2013 Dominican Republic - Internal Revenue launches internal social responsibility campaign “Green DGII” Dominican Republic - October Collection reach RD $ 26,335.2 million Panama - Preliminary Collection Report October 2013 Paraguay - Tax collection increases in October IBFD News Training Events New in the web Other Documents of interest

Event’s official photo.




Among the main issues that were discussed are the aspects relating to the planning of transfer pricing audit processes, the functional and economic analysis, the selection of the appropriate method, the identification of comparable transactions, the intra-group services, intangibles, the exchange of information between States, the negotiation and management of APA-BAPA-MAP, the agreements to avoid double taxation and some relevant court rulings.

CIAT authorities participate in the XVI CeATS Technical conference We invite you to CIATalks, the space provided by CIAT. Read the posts, give your opinion and actively participate

CIAT is a public international organization which groups the tax administrations of 38 countries, (31 Amarican countries, 5 European countries, 1 African countries and 1 Asian country. India is an associate members), for the purpose of providing an integral service for the modernization of those administrations, by promoting their evolution, social acceptance and consolidation through the exchange of knowledge, experiences and the rendering of specialized technical assistance.

Executive Council

With the participation of top level authorities of the Inter-American Center of Tax Administrations (CIAT), the XVI CeATS Technical Conference was held on November 7 and 8 in the City of Cordoba, Argentina. The purpose of these meetings is to exchange experiences, mutual collaboration and technical assistance between the municipalities in Argentina and abroad. The participation of the CIAT Executive Secretary and the Director of International Cooperation and Taxation, Márcio Ferreira Verdi and Gonzalo Arias, respectively, is framed within the cooperation agreement signed last year between this organization and the Center of Subnational Tax Administrations (CeATS), for the purpose of coordinating agendas in areas of common interest, thereby allowing for achieving synergies as a result of carrying out joint activities and sharing knowledge and ideas, among other things. The meeting was inaugurated by Mr. Carlos Walter, President of CeATS and Governmental Administrator of Public Revenues (AGIP) of the Autonomous City of Buenos Aires. He pointed out “the importance of counting on more modern and forceful tax administrations with the necessary tools” as a way of strengthening a State that may be ever closer to the citizens and his needs. In this regard, he noted that “tax autarchy is a management model

Executive Secretariat The e-CIAT Newsletter is published and distributed electronically biweekly.


Contact us: CIAT Executive Secretariat / e-CIAT Newsletter P.O. Box 0834-02129 Panama, Republic of Panama. Phone (507) 265-2766 / 265-5994 Fax: (507) 264-4926 E Web Site: Photo caption, left to right: Carlos Walter, President of CeATS and Government Administrator of Public Income (AGIP) of CABA; Marcio Ferreira Verdi, Executive Secretary of CIAT; and Carlos Rubinstein, General Collection Sub-Director of the General Revenue Directorate (DGR)



that has proved to be effective since it allows greater flexibility for combatting evasion”. Likewise, he highlighted the fact that there are more than ten provinces with autarchic tax administrations. On the other hand, according to Mr. Márcio Ferreira Verdi, it is “difficult to speak of sustainable measures if resources in the region are not balanced”. He also expressed concern because “the technological gap is widening” according to each country’s development. By way of conclusion he stated that in order to be more effective, tax administrations “should not only be content with fulfilling the budgetary collection goals, but rather the reduction of the evasion indexes should be their permanent objective”. Over 180 officials representing various subnational tax administrations will discuss: “The Perception of Risk: generation of significant and lasting actions”. The main focus will be on voluntary compliance at two levels: medium and long-term by taking into account the development of tax awareness and culture and within short term, the generation of the sense of risk.

Regional Seminar on: “Strategic planning in tax administrations of Central America” A seminar with practical approach sponsored by the Tax projects from the German Cooperation GIZ of El Salvador, Guatemala, the CIAT and the CAPTAC - RD. Agents from the planning divisions of the tax and finance administrations of Costa Rica, Guatemala , Honduras and Nicaragua met in Antigua, Guatemala , from 4 to 6 November 2013. After stimulating presentations by Mr.Oscar Vazquez ( CAPTAC - RD ) , Patricio Barra ( Chile) , Johannes Carrasco Procel ( Ecuador ) and Leiner Vargas Alfaro ( Costa Rica ), the participants discussed the theoretical and practical requirements for strategic planning in their institutions . The participating countries presented the status of their strategic planning development, sharing practical experiences. They discussed the importance of having an adequate strategy and consistent indicators to meet the goals of the strategic plan. They concluded that “less is more “ and that it is preferable to focus on few but well-chosen indicators. This event has been a good starting point to continue developing this topic in tax administrations throughout Latin America. An exchange of practical experience helps to avoid errors and prevents the selection of unrealistic strategic planning objectives. A regional dialogue allows to progress in the drafting of efficient national action plans.

Group picture of the event



Las Administraciones Tributarias Informan

Argentina - Switzerland agree on a new agreement to avoid double taxation This agreement ensures a transparent tax information exchange in accordance with the international standard. The Republic of Argentina, through the Federal Public Revenue Manager, Ricardo Echegaray, and the Swiss Confederation, represented by Ambassador Johannes Matyassy, have drafted a final agreement to avoid double taxation, ensuring the exchange of tax information between the two countries in order to provide a favorable environment for foreign investment, within a legal certainty framework. Carlos Alberto Sánchez Correspondent

Bolivia - Collection increases 24% and reaches 39.436 million Bs in October 2013 The National Tax Service (SIN) increased tax collection 24 percent in October 2013, reaching 39.436 million Bs, reported its Executive Chairman, Erik Ariñez Bazan. The collection reaches 7.562 million Bs compared to the same period of 2012;. This increase is the result of the dynamism and good performance of the Bolivian economy and the tasks of tax monitoring and controlling performed by the SIN, the Chairman said. Juana Patricia Jiménez Soto Correspondent

Dominican Republic - Internal Revenue launches internal social responsibility campaign “Green DGII” The Internal Revenue Department launches the social internal responsibility program “Green DGII” with the purpose of developing an organizational culture committed to protect the environment and promote best practices for the sustainable development of natural resources. The project “Green DGII” began last October with an Institutional Recycling Plan, which promotes the use of leaflets made with recycled material towards a more friendly culture for the environment. Nieves Vargas Collado Correspondent



Dominican Republic - October Collection reach RD $ 26,335.2 million The Directorate General of Internal Taxes (DGII) stated that by eliminating the effects of the amnesty (Law 309-12) of the Reform (Law 253-12) and the advance tax on financial assets of financial intermediaries for comparing the collection with the year 2012, and subtracting the extraordinary capital gain collection from the sale of the Dominican National Brewery shares corresponding to the year 2012, the collection would have reached RD $ 14,649.7 million above the amount collected in January-October 2012, equivalent to a growth of 7.4%. Nieves Vargas Collado Correspondent

Panama - Preliminary Collection Report - October 2013 In comparison to the previous year, October results show an increase of B/.149 million (34.6%). The cumulative current revenue for October totaled B/.5.047 million, exceeding by B /. 142.7 million (2.9%) the budget of the period. The result represents a cumulative growth of B /. 279.7 million (5.9%) in comparison to the same period of the previous year.

Paraguay - Tax collection increases in October In October 2013, the State Taxation Sub-Secretariat (SET) collected around 489 billion of Guarani, which represents an increase of 65 billion of Guarani (a 15.5% increase) than the revenue collected by the SET in October 2012. So far this year (January to October 2013), the SET has collected a total of 6 billion of Guarani. This represents an increase of 525 billion guaranĂ­s in regards to what the SET has collected in the same ten months of 2012, in which they collected a total of 5 trillion 831 billion of Guaranies.. Elizabeth FernĂĄndez de Corrales Correspondent



IBFD News International Bureau of Fiscal Documentation (IBFD) Cooperation- CIAT - IBFD

This section includes a selection of the IBFD news about aspects of tax policies and tax administration. This information is available on the CIAT website and in Fridays Tax News alert.

Training As part of our commitment to support the human talent development within the TAs, we have started the registration process for the courses that begin in the first half of 2014, please find here the general information for each of the available programs.

Events Tax Policy Fire Side Chats

WU Global Tax Policy Center at the Institute for Austrian and International Tax Law. Vienna, Austria November 20th, 2013 The WU Global Tax Policy Center at the Institute for Austrian and International Tax Law is happy to invite to the fifth of a new series of tax policy discussions between Prof. Jeffrey Owens and leading players in the field of tax policy. These “Tax Policy Fire Side Chats� will focus on issues which are currently preoccupying governments, business and civil society and will enable a wide audience to participate in these policy debates.



New in the web “Metiendo Presión: Estimando la Verdadera Carga Fiscal de América Latina y el Caribe. La Presión Fiscal Equivalente” Authors: Alberto Barreix, Juan Carlos Benitez, Martin Bes, Miguel Pecho and Fernando Velayos (Working Paper) Instituto de Estudios Fiscales 2013

The authors analyze the performance of tax revenues in Latin America and the Caribbean (LAC) between 1990 and 2010. The analysis is performed using the database developed by the IDB and the CIAT and the definition of Equivalent Tax Burden (ETB), including tax revenues administered by the central government and subnational governments, income from the exploitation of natural resources and those financing the social security system. It also examines the convergence of the ETB between LAC countries and the Organization for Economic Cooperation and Development (OECD), a historical comparison between the development of countries, the importance of their tax resources and an econometric analysis of their tax effort (available in spanish only).

Other Documents of interest “Impacto de la Informalidad en la Recaudación del Impuesto sobre la Renta de las Personas Físicas” Impact of underground economy in Individual Income Tax Collection Department of Economic and Tax Studies Section of Tax Studies and Measurement General Directorate of Internal Revenue Diminican Republic Outober, 2013

The underground economy is an important part of the economy in developing countries; in Dominican Republic it represents more than half the labor market and is one of the main promoters of economic activity, which suggests that it is also an important source of non-compliance in tax matters. This research describes the main characteristics of this sector, its origins and its impact on Individual Income Tax for the Dominican Republic (available in spanish only).

Effective Inter-Agency Co-Operation in Fighting Tax Crimes and Other Financial Crimes OECD Second edition 2013

Financial crimes are increasingly growing in sophistication. Criminals accumulate significant sums through offences including drug trafficking, fraud, extortion, corruption and tax evasion. Different government agencies may be involved in detecting, investigating and prosecuting these offences and recovering the proceeds of crime.



Bribery and Corruption Awareness Handbook for Tax Examiners and Tax Auditors OECD November, 2013

The purpose of this handbook is to raise the awareness of tax examiners and auditors of issues concerning bribery and other forms of corruption and provide guidance on how to recognize indicators of possible bribery or corruption in the course of regular tax examinations and audits.

Evading the Net: Tax Crime in the Fisheries Sector OECD November, 2013

This report looks at the issue of tax crime in the fisheries sector, including frauds over taxes on profit and earnings, customs duties, VAT and social security, with examples from real cases. These include crimes that rely on features characteristic of the fisheries sector, as well as those seen in other industries.